A free market and private enterprise work best when healthy competition prevails, and citizens receive their needs and want at a price point that is competitive and provides a fair return to shareholders. But we know that is an ideal state. Private enterprise is driven by the desire to maintain a competitive advantage over competitors. It uses all the tools in management to stay ahead of the game. When extended beyond a point, it drives competitors out of competition and turns monopolistic. At this stage, free market and private enterprise secure unrestrained pricing power. In this state, the customers are losers.
Regulation is critical for a system’s health based on the free market and private enterprise. An independent body respected by all is an essential feature of a good regulator. It is here that the role of the state begins to come in. When we continue to build on this argument, we will find that certain functions like national and state security will fall under the purview of the state.
The role of the state extends beyond national and state security and regulation. Society contains underdogs, the disadvantaged, poor, vulnerable, and the weak. They, too, have the right to live and thrive. They must also be allowed to leverage their strengths and emerge as winners. Whatever system a society decides is good, it has to cater to these needs. Much of these needs can also be met by private enterprises. Private enterprises will require to be structured for this purpose.
The UNDP’s sustainable goals must be met in a fair and just society. For ready reference, here is the list of the 17 goals:
(1) No Poverty,
(2) Zero Hunger,
(5) Gender Equality
(10) Reduced Inequality
(13) Climate Action
(14) Life Below Water
(15) Life On Land
When we debate the role of private enterprise, we need to bear that these goals should be met, irrespective of who is the provider.